The Tory immigration spokesman was held for nine hours and had his parliamentary and constituency offices raided, as well as computers taken away, last November.
Then home secretary Jacqui Smith told MPs at the time that the arrest had been conducted in order to prevent future leaks which could have an impact on national security.
But an independent report by former British Transport police chief constable Ian Johnston said the leaks were merely a source of 'embarrassment' for ministers.
'In my view, the manner of Green's arrest was not proportionate because his arrest could have been carried out on an appointment basis, by prior agreement, and when he could be accompanied by his legal representative,' he wrote in his report.
A second report from HM Inspectorate of Constabulary says that police should only investigate the most serious leaks concerning breaches of the Official Secrets Act, the overall wellbeing of the UK or involving serious criminality; leaving the rest to be dealt with internally.
'The Home Office leaks were not a threat to national security and yet the police became involved in an investigation,' commented HM chief inspector Denis O'Connor.
'The smooth running of government is not an obvious matter for the police. The police are generally considered to be part of the state, but not an instrument of the executive as such.'
Six months ago the director of public prosecutions announced that neither Mr Green nor Christopher Galley, the civil servant responsible for leaking the material to the Tories, would be prosecuted.
Mr Galley was however sacked for gross professional misconduct.
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